Money Story: How Melanie Overcame $100,000 Worth of Student Loans

Hey peeps! I’m excited to feature my friend Melanie from the blog Dear Debt and her experience with crippling student loan debt and how she overcame it. She also has a book out which I’m devouring right now. Go ahead and check it out!

Alrighty, I’ll stop typing. Read on to find out her amazing story.

I got into $81,000 in student loan debt. I borrowed $23,000 for my undergraduate degree and $58,000 for my graduate degree from NYU. With interest, I probably paid closer to $100,000. I went to California State University Long Beach for my undergrad, which was fairly affordable, but NYU was my “dream school” — a very expensive, private school.

For so long, I believed what everyone told me: that student loans were the “good debt.” I thought education was worth it at any price. I was shocked that I got into NYU and had always wanted to live in New York, so it was really easy for me to justify taking on those student loans to make that dream happen.

At the time, I was confident about my life after graduation and thought I’d be able to pay back my loans easily. Unfortunately, that wasn’t really the case.

I had a moment of debt denial shortly after graduation [Note: In case you didn’t know, debt denial is when you don’t acknowledge your debt and pretend it’s not there. Melanie’s story of debt denial is unfortunately too normal for many of us, and if you read her book and are in debt, you may see yourself in her shoes.].

I signed up for Mint.com and synced all my student loans, income and expenses. I was shocked to find out that after five years of making minimum payments, I still had $68,000 left. Seeing that number in black and white made me nauseous.

Because I was in denial, I didn’t have a clear understanding of how much I was spending or where it was going. I was busy being in survival mode. Not taking action ended up costing me more money in the long run. Denial can feel comforting at first, but eventually you’re forced to deal with reality.

In December 2011, six months after graduation I still hadn’t found a job in New York City. I had part-time work, but I realized I couldn’t pay back my student loans and live in NYC. I made the tough decision to leave New York and move to Portland. My partner was there, so it was a good move for me. But I felt like that’s what I had to do, it wasn’t necessarily what I wanted to do. When I arrived in Portland, things got worse. I could only find temp work at $10 to $12 per hour and began to sink into a deep depression.

Even though I didn’t want to move, moving to a lower cost of living helped a lot. My rent was cut in half. I didn’t have many expenses. I didn’t have a car, health insurance, a pet, TV, cable, nothing. Once I realized I couldn’t cut back any further, I started to make side hustling my priority.

I found work on Craigslist and TaskRabbit. Eventually, I started my blog as a way to keep myself accountable to paying off debt. It was a total game-changer for me and helped me land freelance writing gigs. I am now a full-time freelance writer and event planner, working with financial brands!

Life feels amazing being debt-free. It’s nice to have more choices and have less stress over money. I no longer am pained by every purchase. I am no longer sick of seeing my balance or how much interest I am paying.

I have been able to save more and spend money on experiences. It’s awesome!

I have a much healthier relationship with money now. I am more confident now that I have side hustled my way out of debt and created my own job. I am making far more now than I did working for nonprofits.

I feel at peace with having my debt gone and am ready to start aggressively saving and investing.

We are working on paying down our $124,000 in debt. Amazing how people leave so much money on the table by not refinancing or certifying their PSLF status. Instead of paying so much in interest some of that money could be going to principal and accelerate the payoff schedule

Travis, lovely to chat with you and see you over in my neck of the woods! I profess that I don’t know much about student loans. I’m going to point people over to your site if I get questions like that!

Wow that is so incredible and really inspiring! It sucks that even though she got into her dream school she was left with so much debt, but I love that she created her own way to get out of debt. Hoping the same will happen for me and my blog. Great job, Melanie!

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